PROJECT SUMMARY/ABSTRACT Re-hospitalization of Medicare beneficiaries is frequent, costly and is an indicator of inefficient and/or poor quality of care. Elderly patients are particularly susceptible to readmissions. Recent policy changes, such as the establishment of the Hospital Readmissions Reduction Program which penalizes hospitals with risk- adjusted readmission rates above the national mean, have placed further importance on reducing these events. For these reasons, providers and policymakers have engaged in substantial efforts to reduce re- hospitalization rates. Implementation of electronic health records (EHRs) may be an effective approach towards reducing readmissions. The nation has made an unprecedented investment in EHRs by making approximately $30 billion available to providers through the Health Information Technology for Economic and Clinical Health (HITECH) Act of 2009. Under HITECH, financial incentives are made available through Meaningful Use, which requires participating hospitals to fulfill certain objectives defined by the Center for Medicare and Medicaid Services. The incentives are expected to lead to an additional 25% of US hospitals adopting EHRs that otherwise would not have chosen to do so resulting in an overall anticipated adoption rate of 85%. EHRs facilitate the availability of clinical information and have been associated with improvements in the quality of care. If these quality improvements reduce the likelihood of re-hospitalization, as early evidence suggests, EHRs may provide an effective intervention for reducing re-hospitalization rates. In this study, we will first characterize EHR adoption patterns among hospitals. A particular focus will be placed on hospitals that serve a disproportionate share of poor patients to examine whether a previously documented digital divide has persisted or been exacerbated by the incentives offered through Meaningful Use. This will be done with regression analysis to identify hospital characteristics, such as the proportion of Medicaid discharges, associated with participation in Meaningful Use. The proposed study will then provide evidence of EHRs' influence on re-hospitalization rates of elderly Medicare beneficiaries. To achieve this goal, a fixed effects regression analysis will be undertaken to quantify the relationship between hospitals' participation in Meaningful Use, and adoption of EHRs without participation in Meaningful Use, on the 30-day readmissions of elderly Medicare beneficiaries. Dually-eligible beneficiaries participating in both Medicare and Medicaid may be at particular risk of re-hospitalization. Therefore, using a sample of dually-eligible beneficiaries, we will assess the impact of hospitals' adoption of EHRs on re-hospitalization using the same analytic approach. The results of the study will provide evidence of the value added to health care in US through the nation's investment in EHRs.